[Reporter's view] Obesity-themed stocks

The theme stock craze is happening again.

 

This time it is related to obesity treatment.

 

Companies that ride on theme stocks easily hit the upper price limit.

 

There is also a bio venture that recorded the upper limit three times, ‘up, up, up’ on the full moon.

 

It is easy to find companies whose market capitalization has doubled in just a few months.

 

As obesity treatment has recently become a global issue, the corporate value of related theme stocks is also increasing.

 

In fact, Eli Lilly ranked first in market capitalization among global pharmaceutical companies as its diabetes treatment (Maunjaro) showed effectiveness in treating obesity.

 

It can be seen as ‘theme stock = future growth potential’.

 

The possibility leads to a rise in ransom prices.

 

Everyone can understand the upper price limit phenomenon to some extent.

 

However, we need to take a closer look.

 

Above all, attention should be paid to the feasibility of realization (commercialization).

 

This is because most of the theme companies only discovered the possibility of treating obesity in the early stages of clinical trials.

 

These are materials that have potential but still require time and money to create substance.

 

Hanmi Pharmaceuticals, which is preparing for phase 3, is only in late-stage clinical trials for some products, including 'Efpeglenatide'.

 

Even if it is developed, it must be checked whether it is the first in class, the best new drug (best in class), or simply a drug in the same class.

 

You should also look at the development status of other competitors.

 

Only then can you truly know the corporate value of theme stocks.

 

Some companies launch large-scale promotions related to themed stocks.

 

“We discovered the potential for an innovative new drug in preclinical trials,” “We are negotiating with a number of global companies for technology transfer,” and “We have overcome the limitations of the world’s No.

 

1 obesity formulation.” Just looking at the press release, it appears that it has already achieved innovative new drug status.

 

At this time, stock prices fluctuate.

 

Some even feel pressured to promote even the slightest possibility in order to belong to a themed stock.

 

In reality, Pharmaceutical Company A is under pressure from its owner.

 

Bio ventures that need financing are also active.

 

Companies under put option pressure are busy riding theme stocks.

 

Raising the stock price makes it easier to raise funds and avoid put option pressure.

 

“It is safe to say that corporate value is based on theme stocks.

 

Objective figures such as performance do not apply.

 

I believe rapid fluctuations are determined simply by whether influence is brought in or not.

 

This is why companies related to theme stocks are excessively promoting them.

 

In particular, to raise funds, etc.

 

“Bio ventures that need to raise their stock prices sometimes throw unreasonable numbers.” This is not an unconditional criticism of the theme stock craze.

 

In the case of a company, it must make its value known.

 

However, what is unfortunate is that companies are often found to focus on increasing market capitalization by riding the bandwagon of theme stocks rather than the company's original value.

 

It is also unfortunate that the market trend is ‘theme stocks, power = market cap’ rather than ‘performance, potential = market cap’.

 

On the other side the surge in theme stock prices is a bitter reality.